Ideas and Comments on Making Deals Work

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Leadership Counts

A lot of acquisition integration guidance focuses on the people handling the day-to-day grunt work of managing a deal’s integration. But it should come as no surprise that corporate leadership on both sides of the deal plays a large role also. Consultant J. Keith Dunbar has written a short but interesting piece for the September issue of Harvard Business Review that quantifies this effect.

Dr. Dunbar concludes that there are key attributes in a leader that can be predictors of deal success. They differ as between the leadership of the acquirer and the target but not by much. For example, leaders from both sides of the more successful transactions were found to be strong on motivating others, influencing others, and building relationships. Other strengths on the side of the acquiring leadership were the ability to develop others, act with integrity, show adaptability and focus on customer needs.

Let’s pause on these attributes for a moment. What can we learn if we look at Dr. Dunbar’s conclusions from 35,000 feet? The MergerVerger has some thoughts:

The likelihood of deal success increases when acquirer leadership takes an active role. Why? One would hope that leadership is able to keep out of the daily muck of deal administration and make sure that the integration team is keeping their eye on the strategic objectives of the deal. Lose sight of those in the morass of daily details and your team’s way can get lost very quickly. So the skills of motivating others and focusing on customer needs make a key contribution here.

It is also clear that the visibility of acquirer leadership and his or her power to communicate objectives and other deal factors to the newly combined staff is vital. You cannot influence and develop others without these skills and without putting them to priority use often.

And we can see that deals work better when leaders give their subordinates something to look up to. Why else would integrity or adaptability matter? Particularly in the kind of turbulence that an acquisition represents, giving your staff the belief that their company’s leadership will act rightly in the face of new and changing circumstances will help you keep your best people and will motivate your team at large.

Today’s artwork is Irma-Maria (2010), a pair of sculptures by Jaume Plensa exhibited in 2011 at the Yorkshire Sculpture Park in Yorkshire, England. You can see more on Plensa, a Catalan artist, here or the sculpture garden here.